Written by Christopher Reilly
Adult children are returning to the nest in growing numbers, if not actually to live, then at least long enough to hit up their parents for money.
How do parents decide when to say yes and when to say no? We spoke to financial planners and parents who have been there to find strategies to help you deal with this sticky situation logically, effectively and without guilt.
There are many reasons adult children might need financial assistance. Considering job layoffs and lack of personal savings, many adults are going back to mom and dad for help, a phenomenon known as “boomerang kids.”
“There are a variety of situations that put adult children in the position of having to ask parents for money,” said Andrew Schrage, the founder and CEO of a personal finance website. “It could be an inability to find work after graduation, a job loss, or simply struggling with monthly finances because of the recession and higher prices.”
Should I help them? (Maybe.)
Whether or not you give assistance to an adult child is a personal decision, but Schrage asks parents to consider the situation with “as much objectivity as possible.” If your child needs help due to a circumstance that is no fault of his or her own, such as an involuntary job loss, Schrange believes parents should do what they can. But different situations require different actions: “A recent college graduate who can't find work, but is not taking every opportunity to get some money by taking any available job might be handled a bit differently,” Schrage said.
Likewise, allowing a child to move back home, if it's a viable option, can reduce the amount of financial assistance needed. “In this scenario, the adult child should be charged a monthly rent commensurate with his or her current salary,” he said.
Parents have to determine for themselves if they are helping their children or enabling them. According to Sean Nisil, a San Diego-based blogger, author and financial planner, lending a hand is a gracious thing, but enabling poor choices and supporting bad financial habits will do your children more harm than good in the long run. “Make the hard choices now and set your children up for long-term success,” Nisil said. “Even if that means saying no.”
Should I teach them money lessons? (Always.)
Teaching children about personal finance is key. Money education should start young, because it’s never too early to make sure the lessons stick. Kelly Umphenour, a blogger and mother to three girls, said that when her 16-year-old daughter got her first job, Umphenour helped her with some necessary expenses, and she showed her how many hours she had to work to pay for certain things.
“Say a sweater cost $50, I'd ask her how many hours she had to work to pay for it,” Umphenour said. “If she wanted money, she had to earn it. Simple. I had two other kids, so giving in was impossible.”
TELL US: Have you given your adult children financial assistance? Under what circumstances is it a gracious act vs. one that's enabling? Post your thoughts in the comments section below.
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